Colonies of recombinant Streptomyces bacteria are designed to produce enzymes called cellulases. With these enzymes, the bacteria can break down cellulose on the way to producing ethanol. (Courtesy of NREL/U.S. Dept. of Energy/Photo Researchers)

On January 31, Ari Patrinos was sitting in his living room in Rockville, MD, listening to the State of the Union speech and slowly nodding off. Suddenly, he was jolted awake.

“We’ll also fund additional research for cutting-edge methods of producing ethanol,” President Bush was saying on the television, “not just from corn but from wood chips and stalks or switchgrass. Our goal is to make this new kind of ethanol practical and competitive within six years.”

Unlike most of the legislators who gamely applauded the president’s words, Patrinos understood exactly what they meant. In fact, he had dashed them off himself days earlier at the harried request of his boss, unaware that they were destined for the State of the Union speech. Patrinos, then associate director of the U.S. Department of Energy’s Office of Biological and Environmental Research, had been touting cellulosic ethanol as an alternative energy source for years, only to be met with indifference or ridicule. Now, it seemed, even the most petro-friendly of politicians was convinced.

Producing ethanol fuel from biomass is attractive for a number of reasons. At a time of soaring gas prices and worries over the long-term availability of foreign oil, the domestic supply of raw materials for making biofuels appears nearly unlimited. Meanwhile, the amount of carbon dioxide dumped into the atmosphere annually by burning fossil fuels is projected to rise worldwide from about 24 billion metric tons in 2002 to 33 billion metric tons in 2015. Burning a gallon of ethanol, on the other hand, adds little to the total carbon in the atmosphere, since the carbon dioxide given off in the process is roughly equal to the amount absorbed by the plants used to produce the next gallon.

Using ethanol for auto fuel is hardly a new idea (see “Brazil’s Bounty”). Since the energy crisis of the early 1970s, tax incentives have pushed ethanol production up; in 2005, it reached four billion gallons a year. But that still translates to only 3 percent of the fuel in American gas tanks. One reason for the limited use of ethanol is that in the United States, it’s made almost exclusively from cornstarch; the process is inefficient and competes with other agricultural uses of corn. While it is relatively easy to convert the starch in corn kernels into the sugars needed to produce ethanol, the fuel yield is low compared with the amount of energy that goes into raising and harvesting the crops. Processing ethanol from cellulose – wheat and rice straw, switchgrass, paper pulp, agricultural waste products like corn cobs and leaves – has the potential to squeeze at least twice as much fuel from the same area of land, because so much more biomass is available per acre. Moreover, such an approach would use feedstocks that are otherwise essentially worthless.

Converting cellulose to ethanol involves two fundamental steps: breaking the long chains of cellulose molecules into glucose and other sugars, and fermenting those sugars into ethanol. In nature, these processes are performed by different organisms: fungi and bacteria that use enzymes (cellulases) to “free” the sugar in cellulose, and other microbes, primarily yeasts, that ferment sugars into alcohol.